News & Insight

The real cost of the BT Ofcom fine

Max White

It's a lot to cough up, but British Telecom aren't the real victims here

This morning we learned that Ofcom has fined BT a whopping £42 million for cutting compensation payments. It’s the biggest penalty the telecoms regulator has handed down since it was started in 2003. Unfortunately though, BT's fine to pay isn’t the story here.

The real cost will be picked up by British consumers and businesses who continue to wait for faster, better broadband.

The fine

An Ofcom investigation found that between 2013 and 2014 BT Openreach had cut compensation payments to telecoms awaiting new line installations. Service providers like Sky, TalkTalk and XLN.

The record £42 million fine reflects the seriousness of the misconduct and the impact it has on protecting “competition and, ultimately, consumers and businesses”, says Ofcom’s Investigation’s Director Gaucho Rasmussen.

The real victims

And Gaucho is right. Sanctions against BT have a devastating knock-on effect for end users. BT will take a fine like this on the chin; it’s no stranger to a scandal or two. It is the small business owners who lose in the end, and are already losing now.

A quarter of UK businesses – despite an imminent Brexit and pleas for an EU Trade Deal – are being stunted by a lagging broadband infrastructure. Earlier this year it was reported that the UK placed 20th in the world league table of average broadband speeds. The Czech Republic and Romania, by comparison, placed higher.

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XLN Founder and CEO Christian Nellemann has penned his own response to the announcement on LinkedIn. Read it here.